WASHINGTON -- U.S. services companies saw their growth rate taper off in March, as hiring and business activity remained positive but dipped relative to February.
The Institute for Supply Management, a trade group for purchasing managers, said Wednesday that its services index fell to 55.2 last month from 57.6 in February. Any reading above 50 signals growth.
The report points to the United States economy continuing its nearly eight-year recovery from recession, a sign that many consumers and businesses are on a solid footing. Services -- which can range from home buying to doctor's visits to hair salons -- account for the vast majority of the U.S. economic activity.
But some firms also reported a degree of uncertainty regarding the Trump administration in the survey used to compile the report.
One finance company said there is a "large amount of future uncertainty" regarding efforts to replace former President Barack Obama's health insurance law. Another health care firm highlighted uncertainty as well, while a company in the accommodation and food services sector said there are possible challenges because President Donald Trump's exact policies on trade and immigration are "unknown."
"We had this euphoria after the election that was reflected by our respondents in their comments and the numbers as well, and then there's this uncertainty that we're experiencing right now which pairs with this cautiousness because the comments throughout talk about trade, immigration, health care," Anthony Nieves, chairman of the institute's non-manufacturing survey, said during a conference call with reporters. "We're seeing a little bit of waning only due to that uncertainty."
The services sector has now expanded for 87 straight months. But the employment reading dropped to 51.6 last month from 55.2 in February, while business activity and production pulled back to a reading of 58.9 from 63.6.
Fifteen services industries reported growth in March, including retailers, real estate and food services. But three sectors contracted: information, education and scientific and technical services.
The report also raises questions about the government's employment report to be released Friday. Analysts predict that report will show 178,000 jobs were added in March, according to data provider FactSet. But a private survey by payroll processor ADP said Wednesday that businesses added 263,000 jobs in March, the most since December 2014.
Information for this article was contributed by Patricia Laya of Bloomberg News.
Business on 04/06/2017